Justice – finally – is served

[Star Tribune, December 29, 2009] These days, doctors and nurses who provide anesthesia work side-by-side in the operating room and birthing suite, dispensing the drugs that keep patients blissfully unaware of pain.

Yet this relative harmony came after a decade of bitter litigation in which the nurses accused doctors and hospitals of defrauding Medicare and conspiring to keep nurses subservient and poorly paid.

Two nurse anesthetists from the Twin Cities sacrificed their careers to pursue lawsuits against Allina Health Care, which ended with a settlement and changes to Medicare rules that helped save the profession.

Despite the victory they helped bring about, Ladonna Schweer and Gayle McKay were left behind. This year, they had to sue their own organization, the Minnesota Association of Nurse Anesthetists (MANA), in order to make the group honor its long-standing vow to compensate them for putting their ideals ahead of their jobs.

When Schweer sat down in a Hennepin district courtroom in October, she had waited 15 years for justice. She was fired from an Allina-owned hospital, blackballed from jobs in the Twin Cities and forced to take lower-paying work in rural Wisconsin. Then she heard four words from Judge Ann Alton that validated all her feelings.

"Whistleblowers are always punished," Alton said at the hearing.

The next day, the association agreed to compensate Schweer and McKay for their lost wages and benefits, plus interest. Schweer received $788,000 while McKay got $398,000.

"This was not a windfall for me," Schweer, 58, said. "This was money that I lost." Yet she said she would do it again. "I have a hard time looking away from an injustice that I see," Schweer said.

Doctors vs. nurses

The October hearing in Judge Alton's courtroom started with a nasty dispute between two groups of medical professionals in the early 1990s.

Trained to provide sedation and pain relief, nurse anesthetists were increasingly taking the place of anesthesiologists, usually at less than half the cost. In the Twin Cities, nurse anesthetists were mainly employed by hospitals, while anesthesiologists worked for physicians' groups that billed separately for their hospital procedures.

Schweer, who supervised nurse anesthetists at Allina's Unity Hospital in Fridley, was asked to look into Medicare's rejection of bills related to anesthesia services. Anesthesiologists, who are licensed physicians, were charging for procedures actually performed by nurse anesthetists. For example, the doctors might pop in at the beginning and end of a procedure, but they billed as if they were present the whole time.

The hospitals' solution: fire all nurse anesthetists, eliminating any possibility of Medicare double-billing. In early 1994, Mercy and Unity hospitals terminated 38 nurse anesthetists. Schweer and McKay, who worked at Abbott Northwestern, were both active in the 1,000-strong Minnesota Association of Nurse Anesthetists. Though they kept their supervisory jobs, the two realized hospitals were threatening their profession.

In November 1994, with Schweer and McKay's help, the association filed twin lawsuits against Allina, affiliated hospitals and several doctors' practices. The first suit alleged anti-trust collusion designed to put nurse anesthetists under the control of doctors. The second -- filed secretly with the assistance of the U.S. Department of Justice -- accused the hospitals and doctors of defrauding Medicare of millions of dollars.

Long haul to payment

In a 1994 agreement between Schweer, McKay and their organization, MANA became the designated plaintiff, thereby benefiting from any big court judgment.

In exchange, Schweer and McKay were promised a cut of any court proceeds based on the wages and benefits they might lose due to their hamstrung careers.

The gloomy expectations were justified. Once Schweer's involvement in the litigation became public, she said, the hospital turned hostile. Her co-workers stopped talking to her. Her car was vandalized twice, so she stopped parking in hospital lots.

In 1998, the hospital reorganized and Schweer's job was gone. She wouldn't discuss how much of a financial hit she took. But McKay, who lost her job in 1997, said her annual salary dropped from about $88,000 to $29,000. The two nurses estimate the litigation consumed 4,000 hours of their lives.

In September 2003, a settlement was finally reached. Allina and other defendants agreed to pay $2.75 million to the federal government to settle the Medicare fraud allegations. They paid $8 million to the association, which dwindled to $2.7 million after paying legal fees and loans from the national organization.

As a more far-reaching result of the case, Medicare reformed its practices, paying nurses and doctors equally when they collaborate on anesthesia service.

In early 2005, the association appeared ready to fulfill its agreement with Schweer and McKay. But the actuary who calculated the value of the women's lost earnings brought up an unexpected issue: Paying them might get the association in trouble with the IRS, which could reconsider its status as a nonprofit organization.

"No one has ever thought that they did not deserve compensation," said Marc Kessler, a spokesman for the association. "They were worried about the tax-exempt status of the organization."

Schweer figured she could wait for the IRS to weigh in on the issue, but the agency took four years before issuing an ambiguous ruling. When the association still refused to hand over their money in 2009, the two nurse anesthetists went to court.

"It's outrageous that Ladonna and I eventually had to sue to get them to honor the contract that they wrote and they gave to us," said McKay, 64, who's now retired.

The conflict came down to that October day in Judge Alton's courtroom. At the plaintiffs' table sat two lawyers, one of whom was Schweer's daughter, Jennifer Pirozzi, who was a senior in high school when her mother's legal journey began. After a few preliminaries, Alton quickly signaled that her patience with the association had run out.

The IRS issue was "100 percent irrelevant," the judge said, declaring the association should have figured that out before suing in the 1990s. "That is MANA's problem," Alton said. "It is absolutely not Ms. Schweer's problem or any of these other people who are entitled to get money."

Though Schweer has gotten her money, she said she'll keep pressuring the association to compensate another 10 to 15 nurse anesthetists who worked on the lawsuit and signed agreements with the group. Until her colleagues are paid, Schweer said, "it's not over."